reddy's analysis

Interesting piece below talking of Reddy's and the potential on the Generics earnings:

http://www.slideshare.net/chiefsworld/23-march2010-india-daily-from-kotak

"Generic Arixtra (market size of US$172 mn in 2008, sales grew 60% in 2008). Dr Reddys filed the ANDA in March 2009 and is awaiting final approval. We include generic Arixtra revenues of US$27 mn (40% market share, 30% price erosion and 60% share to Alchemia) with EBITDA margin of 40%"

So from my thoughts as to the above that means they expect ACL to have revenues of $41.2m (60% share in total sales of around $68m, $27m to Reddy's).

So and just cause it's there if I did a quick calc on these numbers I get:

$42.2m less say $7m cash burn and then say 15% tax (because of obvious claims accumulated over the years) and we get $29.9m.

190m shares issued divide into $29.9m = 15.7c EPS:

PE 10x = $1.57
PE 15x = $2.35
PE 20x = $3.14


Please triple check anything I have done as it is for my own entertainment and was done in light of the down day we are experiencing, well I see it as opportunity actually. I just happened to come across this new analysis and thought it sounded pretty good, don't know about 30% price erosion though..